The Social Security Impasse

A bipartisan group of senators ponders shoring up the program—but political will is limited.

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A Social Security card sits alongside checks from the U.S. Treasury (Photo illustration by Kevin Dietsch/Getty Images)

Senators known for bipartisan dealmaking don’t often accuse Cabinet secretaries of blatant dishonesty during congressional hearings, but it happened Thursday. “That’s a lie,” GOP Sen. Bill Cassidy told Treasury Secretary Janet Yellen after she said President Joe Biden “stands ready to work with Congress” to keep Social Security solvent.

Cassidy walked back his accusation moments later—but the interaction underscores the difficulty of pursuing entitlement reform in today’s political environment. A bipartisan group of senators is seeking meetings with Biden on Social Security, Cassidy said—to no avail thus far.

“We have not heard anything on our request,” he said during Thursday’s Senate Finance Committee hearing. “And we have made multiple requests to meet with the president.”

The bipartisan working group, an informal cohort, includes Sens. Cassidy, Angus King, Susan Collins, Kyrsten Sinema, Mike Rounds, Tim Kaine, John Cornyn, and Mitt Romney. Members of the group have earned a reputation of being workhorses for bipartisan initiatives in the past, including negotiating the $1 trillion infrastructure bill passed in 2021.

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  1. Avatar photo
    Show Jay Janney the 🚪!

    More Gain of Function research, if done correctly, could reduce SS payments dramatically, making the program solvent. Maybe we blame Uzbekistan this time. Few people even know Uzbekistan exists.

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    Joe Delanis

    Watching the Daily Show last week, Kal Penn made a point of talking about how much of an impact young voting cohorts could have, if they actually showed up to vote.

    And every time young voters (as a homogenous bloc) are a topic of discussion, it always frustrates me to hear them talk about voting for left-wing policy ideas. When - theoretically - they should have sufficient numbers to bring about positive change in SS/Medicare policy.

    I'm a younger worker. These programs are financed by my paycheck withholdings. And if enough of my fellow Millennials, and those Gen Z-ers, increased their electoral participation *and voted as a bloc to reform these programs*, I would be quite interested to see what would happen.

    And to clarify: the reforms I'm thinking of, and hoping for, would be something like means-testing benefits, reducing the payroll withholding taxes, and greater privatization among the well-compensated segment of the workforce. With the eventual goal of replacing Social Security with a more straightforward welfare program that distributes cash assistance based on a recipient's need, instead of his/her age, widow(er) or disability status.

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    1. Avatar photo
      Ben Connelly

      Fellow Millennial here and I agree completely

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    DougAz

    Once again.

    A. Means testing is fine. If that means more than income but situational based
    B. Uncap no max on FICA tax
    C. Add FICA tax to all types of income. Including short and long term capital gains, hedge funds, rollover profits, commercial real estate profits and eliminate loss carry.
    D. OASI as a percentage of GDP fell from near 10% to I recall 6%. There ya go.

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    1. Avatar photo
      Show Jay Janney the 🚪!

      E. Capital Gains from residential Real Estate. That'd be big.

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      1. Avatar photo
        DougAz

        Probably have to be above some threshold perhaps. What do you think?

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        1. Avatar photo
          Show Jay Janney the 🚪!

          In all seriousness, I'd much rather means test it, but we don't have thresholds on other capital gains. It'd raise a ton of money, but it'd anger all those Boomer kids looking to cash out their parents someday.

          If you don't you'll inflate the residential real estate market as a way of holding down taxes.

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            DougAz

            Engineering calls this whack a mole 😂

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  4. DTruitt

    The solution is so obvious it's painful, and of course it's been used before. Set the retirement age slightly older for the youngest workers, many decades away from retirement. Nothing and nobody gets cut. Everyone of us actually gets a gradually increasing retirement benefit due to the actuarial probability of living beyond current full retirement age, and that trend is expected to continue indefinitely. No pain for the youngsters or the oldsters or the in betweensters.

    That's precisely what Congress did exactly 40 years ago. My wife and I reached full SS retirement age at ages 66 years and several odd months, rather than age 65 as it was 40 years ago. We felt zero pain. Nothing got cut. Social Security got saved for the next 50 years.

    However, cynical politics being what it is, Democrats love to have Social Security about to go insolvent so that they can yet again falsely accuse Republicans of pushing Granny off a cliff in her wheel chair - exactly as they ran in their election commercials back in 2012 - and use it as an opportunity to propagandize about Republicans generally being heartless cruel gangsters. Maybe that fools a few old geezers who have trouble remembering their own names, but not sure that it's really an effective campaign message.

    Anyway, if there is any foot dragging on restoring the solvency of Social Security, it is 100% on the Biden Admin and their handmaidens in the Congress and media - not the GOP.

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    1. MathewA

      I agree we need to increase the retirement age, and I would also argue that we need to then index it to life expectancy.

      That being said, given we are only 10-12 years out from a 25% cut, I think the bump to the retirement age won't be decades away but will need to happen much sooner.

      I'm also willing to look at modest tax increases to get this to happen. Probably should also combine this with chain CPI.

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      1. Erin C

        Yes to indexing it to life expectancy.

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  5. Jennifer Stanowski

    I'll also add, I work with many young folks who say, "Oh, there will be no such thing as social security when I retire." But another aspect of a world without SS is what happens to your ne'er do well relatives? I know my parents rely on SS heavily, and I am thankful they have it because if they didn't, I'm the backstop. Anyone who has family members that are not good planners, had better hope SS sticks around.

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    1. Avatar photo
      Jesse.Wick

      This. I’m not even young (52) and honestly have never banked on Social Security still being solvent when I hit retirement age, at least not enough to be more than a small month income supplement at best. But I sure would like it to be around for my parents and in-laws. Sooner or later the can can’t get kicked any farther.

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  6. Stormer93

    It's amazing how little political will there is to even make small changes to Social Security and Medicare. Everyone talks about saving them, but neither party wants to actually do it. Democrats claim they can save the trust fund by (how else?) taxing the rich, their solution to all their big spending plans. Republicans claim that they can save SS and Medicare by cutting spending, ignoring the fact that these are the largest and third largest federal expenditures respectively.

    I would think raising the retirement age a few years or adding a means test would be a good start. After all, Social Security was designed when the majority of our population didn't reach the age of 62. And do Bill Gates, Larry Ellison and Warren Buffet need pensions? If we used SS as originally intended, the benefit age would be something like 80-85. We don't need to be that drastic now, but the longer we ignore the problem, the worse it gets. And judging from the reaction to a similar plan in France, the public simply won't stand for even a small raise. I fear we will need to actually get to the cliff before politicians actually do... something.

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    1. Avatar photo
      Mudskipper

      It is a bit misleading to look at the life expectancy in the 1930s and compare it directly to today. Infant and childhood mortality was higher back then, which reduced overall life expectancy. However, once someone survived to adulthood, they had a pretty good chance of living beyond the age of 65. And for those who reached 65, their remaining life expectancy was only a few years shorter than today.

      80-85 is really too old for most people to be still working. I can say as someone who is about to turn 70 that age simply catches up to you. Mentally, I could still perform most jobs as well as I could when I was younger, but I simply don't have the stamina or resiliency I had when I was younger. I think if I had tried to continue working my desk jockey job, I'd probably be out on disability by now. The repetitive strain injuries were getting harder and harder to overcome and manage. And job stress was also becoming much harder on me.

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    2. DTruitt

      The GOP has always wanted to preserve SS ... it was the Republicans who last saved it 40 years ago, in 1983.

      It is always the Dems who refuse to save SS because they cynically and heartlessly want to preserve it as a line of political attack on Republicans, falsely blaming them for any impasse.

      Note that it is Republicans who are pushing the Biden Admin to work with them on the issue of SS solvency right now, and it is the Bidenistas who are dragging their feet. That's how it ALWAYS works.

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      1. MathewA

        Overall agreed. But to get anything passed it's going to need to be a bi-partisan bill to give both sides cover. So that means some tax increases combined with some benefit cuts. IE raising the retirement age, maybe chain CPI etc

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  7. Jennifer Stanowski

    I'm into my last couple of decades of work and I've played around with those retirement calculators. They give estimates for what you can expect in SS payments, but no explanation. Is that the full amount if this 2035 insolvency is figure out, or is that the 80% that the SSA website says will be available starting 2035. Then is it 80% until I'm dead, or does the insolvency keep draining the system, so I could expect the SSA payout to actually go down over the course of my retired years? I'm getting to a point where I would like answers to plan.

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    1. DTruitt

      Those estimates are based upon current law and specified benefits. If somehow the Federal government were to allow Social Security to be cut or ended, then of course, the estimate is different. But nobody in the government is ever going to allow Social Security to be cut. It would be the instant death of any party that tried to do it.

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  8. Steve Smith

    I don’t understand the work until you die crowd. Being retired doesn’t mean you’re useless. For instance I have time now to put back into my community as a volunteer in ways not possible while working. I also don’t understand the implication that you’re some kind of slacker for taking SSI benefits. I started at 16 and worked full time (and then some) to 66. That’s quite enough I think no matter how long I live hereafter. But in that time there were downsizings and spin offs that made hash of any company sponsored retirement I earned. I’ve done well enough with a 401k and while using SSI was not part of my planning I am grateful that it’s there now.
    Here’s a useful perspective:
    https://www.nytimes.com/2023/03/11/opinion/social-security-medicare-intergenerational-compact.html?smid=nytcore-ios-share&referringSource=articleShare

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    1. MathewA

      the fact that there is a big funding deficit shows that people paying in taxes didn't pay enough. Moreover,

      "That’s quite enough I think no matter how long I live hereafter"

      math doesn't work that way. As people live longer, they must work longer. Also, as the dependency ratio decreases either taxes have to go up a LOT (and not just on the rich) or the retirement age needs to go up, or benefits cut.

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    2. DavidWG

      I agree. We have a fluid economy and business structure, which demands a mobile and adaptable work force. That makes a national pension program a necessity. Some of the suggestions in the article you linked to hold great promise, and our elected officials should be taking them seriously.

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    JohnM.

    Good reporting here. Thanks, folks.
    I'm not sure that this commission will meet with any more success than the Simpson-Bowles National Commission on Fiscal Responsibility and Reform back in 2010. But I applaud the effort nonetheless.

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  10. Avatar photo
    Rajeev

    The only way real social security reform has to be done in a populist way given our current politics. But it involves both parties bucking some of their constituencies:

    1. Eliminate the taxable maximum on social security. Democrats and Republicans can set it up where maybe it phases in and starts by only incomes over $500,000 get taxed above.

    2. Means test social security. This one is nuts why Democrats in particular have opposed this. Time to take on the unions. Both sides could care less if Elon Musk or Jeff Bezos gets social security. Restore it to a safety net that people don’t get if they are 50+ millionaires and get a lot less if they are multimillionaires.

    3. Add a change in retirement age for non blue-collar hard labor workers but only for young people now. Raise it by a few years on young people and a year or so on middle aged people (40s and 50s)

    4. Most importantly use some of the savings from these three things to juice up benefits now. Without some immediate payoff it will be viewed as a cut. But if it increases benefits as part of the plan and mostly relies on Uber-rich to fund those increases people will be willing to support it because it provides more money now and seniors are big constituents of both parties.

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    1. MathewA

      So your solution is huge tax increases and turning SS from an entitlement into welfare. Oh and a benefit increase.

      pass

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      1. Avatar photo
        Rajeev

        I think you misread my post. The only way to make Social Security solvent is to raise the retirement age. The elimination of the cap is technically a tax increase but it is also just fair. It shouldn’t have existed.

        I’m not sure how you get welfare from my post. Social security is by definition a social safety net that was its intent. So there is no reason for Warren Buffett to get the same money as a senior with little to no savings.

        I’m not sure if your post was a serious response but if it was you can research the history of social security. The problem was that retirement age was never tied to life expectancy so as life expectancy rise so did the number of people and duration of benefits.

        But in order to effectively raise the age of retirement there has to be a short term counterbalance there’s no political way for anyone to do it otherwise.

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